10 June 2008

If at first you don’t succeed…

try and try (the same failing approach) again…and again…and again.

Unemployment spiked on Friday. That’s bad news for the Bush Administration; I mean, it’s his fault. Right?

There is an interesting facet to this, which, as Jerry Bowyer explains, the right wing media did not report:

Ask yourself a few questions: Why did unemployment surge at a time when unemployment compensation claims are historically low? More to the point, how could unemployment spike this much without a coinciding spike in corporate lay-offs?
The answer to all of these questions is same: because very few people lost jobs last month. This huge jump in the size of the unemployed comes from new entrants to the economy – hundreds of thousands of them. In short, well over 600,000 people who were not job seekers in April became job seekers in May. And who starts looking for work at the end of Spring? That’s right – students. Hundreds of thousands of students are looking for work right now, and they’re not finding it.

Congress is to blame. Last year Congressional Democrats (along with some Stockholm-Syndromed Republicans) passed the Fair Minimum Wage Act of 2007, which started a phased hike of the minimum wage from $5.15 an hour to $7.25. Free market economists warned them that this would increase unemployment – that rapid increases in unemployment compensation hit teens and minorities the hardest. But the class-warriors are running the people’s house now, and they would hear none of that, so they took to the floor, let loose the dogs of demagoguery, and saddled America’s pizza parlors, municipal swimming pools, house painting businesses and lawn mowing services with a huge cost increase.
In an article on the same topic, Kristen Lopez Eastlick explains:

This year, it’s harder than ever for teens to find a summer job. Researchers at Northeastern University described summer 2007 as “the worst in post-World War II history” for teen summer employment, and those same researchers say that 2008 is poised to be “even worse.”

According to their data, only about one-third of Americans 16 to 19 years old will have a job this summer, and vulnerable low-income and minority teens are going to fare even worse.

The percentage of teens classified as “unemployed” — those who are actively seeking a job but can’t get one — is more than three times higher than the national unemployment rate, according to the most recent Department of Labor statistics.

One of the prime reasons for this drastic employment drought is the mandated wage hikes that policymakers have forced down the throats of local businesses. Economic research has shown time and again that increasing the minimum wage destroys jobs for low-skilled workers while doing little to address poverty.

According to economist David Neumark of the University of California at Irvine, for every 10 percent increase in the minimum wage, employment for high school dropouts and young black adults and teenagers falls by 8.5 percent. In the past 11 months alone, the United States’ minimum wage has increased by more than twice that amount.
Free market economists are not the only ones who tried to warn “ that this would increase unemployment…[and]…that rapid increases in unemployment compensation [would] hit teens and minorities the hardest.” Some of us, with real world expertise in such unimportant and irrelevant things as actually running a business and having to make payroll, also tried to explain why this happens. (And extended here, here, here and here.)

But liberals, whether Democrat or Republican, just know things that others don’t, despite not having the requisite education and experience. They are magical people, capable of bending the laws of economic reality, greater than Moses' parting the Red Sea.

I say, “Almost” because if liberals had been in charge of the Red Sea-parting project the very people they claimed to be helping would have drowned with the Egyptians. (And they'd blame anyone but themselves for the failure. No doubt because no one is a failure who has good intentions for his failing policy. The failure clearly must lie elsewhere.)

I don’t mean to imply that a Red Sea-parting done by conservatives would have been better. Conservatives would have said simply, “Unless God parts it, we shall have to go around,” and proceeded to make preparations for going around.


About Me

James Frank Solís
Former soldier (USA). Graduate-level educated. Married 26 years. Texas ex-patriate. Ruling elder in the Presbyterian Church in America.
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